This summer, my wife and I took our kids on a family vacation to Disneyland in California. The Southern California weather, beaches and a trip to San Diego on Highway 1 made it an experience we'll never forget.
We are a beach family and we dream of one day living by the ocean. The California trip fueled an existing passion that's existed deep within us for some time. We want to watch more ocean sunsets than we can with a yearly week-long vacation to the beach. We take these trips each year and return home dreaming about living close to the ocean someday. We always say we're going to take steps to fulfill this dream - then, life happens. We get busy with the kids, work and whatnot. Our dream, while still present, becomes more and more distant.
But this time, it's different. We are committed to taking our dream to the next step. In fact, we have a checklist and a husband-and-wife agreement on our approach. We are going to take the next step of seriously looking into a move to Southern California. This would be a big change for a family of four in Texas. I know there are many reasons not to move, but there are also many reasons to move. In fact, for the time being, we've agreed to stop thinking and discussing the reasons why we should stay.
Dave Ramsey is right. He's always saying that you have to be prepared because of Murphy's Law. Murphy eventually catches up to all of us. The law says that whatever can go wrong, will eventually go wrong. It applies perfectly to personal finance because we all know that cars need repairs, the AC goes out in the heat of summer, and so on.
Today I'd like to talk about Murphy shows up in your medical expenses.
In general, I feel like my wife and I have done a pretty good job preparing for expenses. At least for the routine ones. Each year we review what we've spent in medical costs and either make a decision to increase or decrease contributions to my company's Flexible Spending Account (FSA). If you know anything about these "use it or lose it" plans, you know you've got to be pretty good at your estimates or you stand to lose some money. Overall, we've done a good job. Most of the time we're a bit short, which is far better than overestimating contributions.